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Silver Lake and CPP Investments Acquires Qualtrics From SAP for $12.5B

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Private equity firm Silver Lake and Canada Pension Plan Investment Board (CPP Investments) have agreed to acquire Qualtrics experience management (XM) software from SAP in an all-cash transaction valued at approximately $12.5 billion.

Silver Lake and its co-investors, together with CPP Investments, will acquire 100% of the outstanding shares Silver Lake does not already own, including the entirety of SAP’s majority ownership interest of 423 million shares. Qualtrics will become an independent, privately held company and its common stock will no longer be listed on any public market., according to a statement about the acquisition.

Silver Lake and CPP Acquire Qualtrics From SAP

Under the terms of the agreement, Qualtrics shareholders, including SAP, will receive $18.15 per share in cash. This represents a 73% premium to the 30-day volume-weighted average price on January 25, 2023, the last full trading day prior to SAP’s announcement that it would sell its stake in Qualtrics, and a 62% premium relative to the unaffected closing price on January 25, 2023, Silver Lake said in the statement. SAP’s stake will be acquired for approximately $7.7 billion.

The transaction is fully financed by equity commitments from Silver Lake and co-investors, together with $1.75 billion in equity from CPP Investments and $1 billion in debt, the companies said.

Qualtrics’s Board of Directors, as well as a Qualtrics committee of independent directors, has approved the transaction, which has also been approved by SAP in its capacity as the principal shareholder of Qualtrics, the companies said. No other shareholder approval is required. The transaction is expected to close in the second half of 2023, subject to customary closing conditions and regulatory approvals.

Qualtrics and SAP said the two companies intend to maintain a go-to-market and technology partnership to service existing joint customers and target new customer opportunities.

Qualtrics will continue to be led by CEO Zig Serafin, and the company will remain headquartered in Provo, Utah, and Seattle, Washington.

Qualtrics Acquisition: Executive Insight

Zig Serafin, CEO, Qualtrics
Zig Serafin, CEO, Qualtrics

Ryan Smith, Qualtrics founder and executive chairman, commented on the news:

“I couldn’t be more excited for this step in our journey. Silver Lake’s belief in our vision and their amazing track record of helping founders and management teams speaks for itself. We look forward to working together and driving category-defining growth to build the next great enterprise cloud platform.”

Zig Serafin, CEO at Qualtrics, added:

“Qualtrics is becoming central to how businesses make mission critical customer and employee decisions that increase revenue and operational efficiency. With our AI-powered platform and automated actions, we help companies deliver exceptional experiences and build deep relationships with their customers and employees at scale. We are incredibly excited to partner with the team at Silver Lake, who deeply understand our business and will help us continue to build a high performing company, invest in our innovation and expand our ecosystem to help our customers succeed.”

Egon Durban, co-CEO of Silver Lake, added:

“We are strong believers in the amazing technology platform that Ryan, Zig and their phenomenal engineering and sales teams are building, and we’re thrilled to support the continued efficient growth of Qualtrics into a generational, highly profitable platform company by enabling further investment across all aspects of the business, including areas such as AI and other powerful new technologies. This is a landmark transaction for Silver Lake, reflecting our confidence in the team and their vision. As they shape and continue to grow the next great enterprise software platform, they are the kind of leaders we have been most excited to partner with over many years of technology investing.”

Christian Klein, CEO and member of the executive board of SAP SE commented:

“Silver Lake has both the operational expertise and the track record with software companies to help Qualtrics extend its leadership in the XM category it pioneered. Since we acquired Qualtrics in 2019 the company has more than tripled its revenue while delivering profitability. SAP intends to remain a close go-to-market and technology partner, servicing joint customers and continuing to contribute to Qualtrics’s success. The number of companies and brands using Qualtrics software has risen from 10,000 at the time of SAP’s purchase to over 18,000 today.”

Barclays acted as financial advisor to SAP on the transaction, Shearman & Sterling acted as SAP’s legal advisor.